REG - Sirius Real Estate - ACQUISITIONS AND DISPOSALS UPDATE

Sirius Real EstateAnnouncement

04/10/2022 11:45

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RNS Number : 7317B  Sirius Real Estate Limited  04 October 2022

SIRIUS REAL ESTATE LIMITED

(Incorporated in Guernsey)

Company Number: 46442

JSE Share Code: SRE

LSE (GBP) Share Code: SRE

LEI: 213800NURUF5W8QSK566

ISIN Code: GG00B1W3VF54

 

 

4 October 2022

Sirius Real Estate Limited

("Sirius Real Estate", "Sirius" or the "Company")

 

ACQUISITIONS AND DISPOSALS UPDATE

 

Sirius Real Estate, the leading owner and operator of branded business and
industrial parks providing conventional space and flexible workspace in
Germany and the UK, announces further progress in its asset recycling
programme with the completion of three acquisitions in Germany for €44.6
million in aggregate. These acquisitions were all notarised prior to the end
of June and have been predominantly funded using capital recycled from three
strategic disposals in Germany and the UK for a combined €33.6 million.

 

The disposals have been made at a premium to book value while Sirius has
undertaken the acquisitions having identified a number of opportunities to
drive future income and valuation growth through its asset management
platform.

 

The three disposals were of assets that offered limited further growth
opportunities due to location and/or condition, and comprised:

·    The completion of the previously announced €13.75 million sale of
the Company's asset in Magdeburg, Germany, which represented a 5.5% premium to
the book value at the time of notarisation.

 

·    Completion of the previously announced £16.0 million sale of a
BizSpace business park in Camberwell, London, at 94% above the asset's
valuation at the time of Sirius' acquisition of BizSpace.

 

·    The notarisation of a €1.0 million 3,200 sqm non-income producing
land plot in Heiligenhaus, Germany which had a book value of €250,000 at the
time of notarisation. This asset is being sold to a supermarket chain as part
of its expansion plans, with the transaction expected to complete in January
2023.

 

The disposals generated an annualised €1.7 million of rental income and
€1.4 million of net operating profit, while the three new acquisitions
totalling €44.6 million currently generate a combined total of €2.3
million of rental income and €1.6 million of net operating profit annually.
The three acquired assets have a combined occupancy of just 54% and offer a
range of avenues for Sirius to leverage its significant value creation
expertise to grow rental income. The acquired assets comprise:

 

·    A €39.8 million (including costs) mixed-use property in
Düsseldorf, Germany, situated 2.6 km from the city's international airport.
The property comprises mainly office and warehouse/light industrial space and
is 55% occupied, offering good value add potential.

 

·    A €3.9 million (including costs) primarily warehouse asset located
in a well-developed commercial area in Dreieich, Germany, that is
strategically adjacent to an existing property owned by Sirius.  We intend to
convert the property into a self-storage facility, adding to our existing
SmartSpace Self-Storage brand that now exists in 32 locations across Germany

 

·    A €0.9 million (including costs) small 239 sqm vacant office
building in Potsdam. The property is placed strategically at the entrance to
one of the Company's existing sites and directly adjacent to the world famous
Babelsberg Film Studios.

 

Commenting on the transactions, Andrew Coombs, Chief Executive Officer of
Sirius Real Estate, said: "The strategic disposal of these mature assets at a
premium to their book value demonstrates our continued ability to drive value
within our portfolio and then crystallise returns, which can be recycled into
new opportunities where we can grow operating income through our asset
management platform.

 

We have identified a number of asset management initiatives within the three
newly acquired properties which will allow us to grow rental income and
occupancy by leasing into markets where we see continued strong demand for our
products.

 

Given the current uncertainty in the market, we now expect to slow our
acquisition pipeline, however we are continuing to monitor numerous
acquisition opportunities so that we remain poised to execute transactions at
the appropriate time in the future. We will also continue to seek to dispose
of non-core or mature assets as and when we feel the timing is right."

 

 

For further information:

Sirius Real Estate

Andrew Coombs, CEO / Alistair Marks, CIO and Interim CFO

+49 (0) 30 285 010 110

 

FTI Consulting (Financial PR)

Richard Sunderland / James McEwan / Talia Shirion

+44 (0) 20 3727 1000

SiriusRealEstate@fticonsulting.com

 

NOTES TO EDITORS

About Sirius Real Estate

Sirius is a property company listed on the main and premium market of the
London Stock Exchange and the main board of the JSE Limited. It is a leading
owner and operator of branded business and industrial parks providing
conventional space and flexible workspace in Germany and the UK. As of 31
March 2022, and following the acquisition of BizSpace, a leading UK provider
of regional flexible workspace, the group's portfolio comprised 140 assets let
to 9,452 tenants with a total book value of over €2 billion, generating a
total annualised rent roll of €167.1 million. Sirius also holds a 35% stake
in Titanium, its €350+ million German-focused joint venture with clients of
AXA IM Alts.

 

The Company's strategy centres on acquiring business parks at attractive
yields and integrating them into its network of sites - both under the Sirius
name and alongside a range of branded products. The business then seeks to
reconfigure and upgrade existing and vacant space to appeal to the local
market via intensive asset management and investment and may then choose to
selectively refinance or dispose of assets once they meet maturity, to release
capital for new investment. This active approach allows the Company to
generate attractive returns for shareholders through growing rental income,
improving cost recoveries and capital values, and enhancing returns through
securing efficient financing terms. The Company has a strong track record for
growing its income and has delivered like-for-like rent roll growth in excess
of 5% for the last eight consecutive years.

 

For more information, please visit: www.sirius-real-estate.com
(http://www.sirius-real-estate.com/)

 

Follow us on LinkedIn at https://www.linkedin.com/company/siriusrealestate/
(https://www.linkedin.com/company/siriusrealestate/)

 

Follow us on Twitter at @SiriusRE

 

JSE Sponsor

PSG Capital

 

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